YILING PHARMACEUTICAL(SZ:002603) EBSCN·2025-07-15 08:22Investment Rating - The report maintains a "Buy" rating for the company [6]. Core Views - The company has received approval for its innovative traditional Chinese medicine, Qifang Bitong Pian, in Macau, marking it as the first approved OTC innovative traditional Chinese medicine for treating persistent allergic rhinitis [1]. - The company is increasing its R&D investment, with a projected 2024 R&D expenditure of 908 million yuan, accounting for 13.94% of revenue, which is a year-on-year increase of 4.88 percentage points, positioning it as a leader in the industry [2]. - The company is expected to see a gradual improvement in performance throughout 2025, with a projected revenue of 2.358 billion yuan in Q1 2025, reflecting a year-on-year decrease of 6.52%, but with a net profit of 326 million yuan, an increase of 7.25% year-on-year [3]. - The company has adjusted its profit forecasts for 2025 and 2026, now estimating net profits of 1.29 billion yuan and 1.46 billion yuan respectively, with a new estimate for 2027 at 1.64 billion yuan [4]. Summary by Sections Company Overview - The company is a leading player in the innovative traditional Chinese medicine sector, focusing on respiratory and cardiovascular fields, and has a competitive R&D system and product reserve [4]. Financial Performance - The company is projected to experience a decline in revenue in 2024, with an estimated revenue of 6.513 billion yuan, a decrease of 36.88% year-on-year, and a net profit forecast of -725 million yuan [5]. - The company’s earnings per share (EPS) is expected to recover to 0.77 yuan in 2025, with a projected growth rate of 12.93% in net profit for that year [5]. Valuation Metrics - The current price-to-earnings (P/E) ratio is projected to be 19 for 2025, decreasing to 15 by 2027, indicating a favorable valuation for potential investors [5][12].